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25 July 2024,06:53
Daily Market Analysis
25 July 2024, 06:53
The dollar index traded in a relatively sideways range, poised at its weekly high, awaiting PMI readings to gauge the strength of the U.S. economy. The UK and eurozone PMI readings are due today and may directly impact the recent lacklustre price movement for both currencies. Conversely, the New Zealand dollar has been trading under strong downside pressure, heading to its 3-month low levels amid heightened speculation that the RBNZ will soon start cutting rates.
On Wall Street, the equity market was dragged down by Tesla, which missed earnings expectations and lacked catalysts, causing all the major indexes to close slightly lower in the last session.
In the commodity market, gold prices edged slightly higher in the last session, while oil prices continued to trade with high downside risk despite the release of strong U.S. crude inventories data last night. The deteriorating demand outlook and surplus oil supply in the market have been weighing on oil prices.
Additionally, the U.S. SEC has approved the first batch of ETH ETFs, with nine ETFs going live yesterday. Both BTC and ETH prices have yet to react significantly to the launch of these ETFs.
Current rate hike bets on 31st July Fed interest rate decision:
Source: CME Fedwatch Tool
0 bps (93.3%) VS -25 bps (6.7%)
(MT4 System Time)
Source: MQL5
The Dollar Index, which trades against a basket of six major currencies, extended its gains ahead of several crucial US economic data releases. This is likely due to bargain buying after the currency hit a crucial support level. Furthermore, major banks like Morgan Stanley and Barclays Plc have suggested that a potential Trump victory could boost the dollar, with Trump’s proposed policies expected to strengthen the currency. The recent news of Joe Biden’s withdrawal from the Presidential race also contributed to the dollar’s rebound.
The dollar index is trading higher following the prior breakout above the previous resistance level. MACD has illustrated increasing bullish momentum, while RSI is at 62, suggesting the index might extend its gains since the RSI stays above the midline.
Resistance level: 104.75, 105.15
Support level: 104.45, 104.05
Gold prices have begun to rebound slightly due to bargain buying and technical correction. Before the release of several crucial US economic data, including the US GDP and US Core PCE Price Index, market participants are entering the gold market to hedge against rising market volatility. The uncertainties surrounding the US Presidential elections are also supporting gold prices. In the short term, a small consolidation movement in the gold market is expected until any significant breakout occurs, which could be triggered by upcoming US economic data.
Gold prices are trading higher following the prior rebound from the support level. MACD has illustrated increasing bullish momentum, while RSI is at 47, suggesting the commodity might extend its gains since the RSI rebounded sharply from oversold territory.
Resistance level: 2425.00, 2440.00
Support level: 2395.00, 2365.00
The GBP/USD pair has broken below another liquidity zone near the 1.2905 level, suggesting a bearish bias. The pair has been trading relatively sideways, awaiting key economic indicators for the week. With the UK’s PMI reading due today, traders will likely focus on this data to gauge the pair’s price movement.
The pair has been trading downward after hitting its one-year high at above 1.3000. The RSI continues to edge lower, while the MACD has broken below the zero line, suggesting that bearish momentum is gaining.
Resistance level: 1.2990, 1.3065
Support level: 1.2850, 1.2760
The euro was dragged down by the downbeat Eurozone Consumer Confidence level, which came in at -13.0, indicating a pessimistic economic sentiment in the region. The EUR/USD pair has dropped below its sideways range, suggesting a bearish bias. Meanwhile, the Eurozone PMI reading is due later today and is expected to provide a clearer direction for the pair.
EUR/USD continues to edge lower and has broken below from the sideway range, suggesting a bearish signal for the pair. The RSI has reached the oversold zone, while the MACD has broken below from the zero line, suggesting that bearish momentum is gaining.
Resistance level: 1.0853, 1.0900
Support level: 1.0816, 1.0770
The AUD/USD pair has slid below its support level at 0.6610, indicating a bearish signal. The Australian PMI reading, released during today’s Sydney session, came in lower than expected, weighing on the Aussie’s strength and leading to a further decline in the pair. The U.S. PMI reading is due later today, and an upbeat reading could push the pair even lower.
The pair has slid by more than 1% this week, suggesting strong downside pressure. The RSI is flowing in the oversold zone, while the MACD continues to edge lower at below the zero line, suggesting bearish momentum is gaining.
Resistance level: 0.6670, 0.6730
Support level: 0.6550, 0.6500
The Japanese yen has emerged as a favourable trading product recently, rising for a second straight session against the dollar. This surge is driven by speculation that the Bank of Japan (BoJ) might increase interest rates following comments from several Japanese politicians about normalising monetary policy. Additionally, potential currency intervention from the BoJ has bolstered demand for the yen. All eyes are now on the BoJ meeting on 31st July, where further restrictive monetary policy decisions may be announced, which could further strengthen the yen.
USD/JPY is trading lower while currently testing the support level. However, MACD has illustrated diminishing bearish momentum, while RSI is at 37, suggesting the pair might enter oversold territory.
Resistance level: 157.60, 159.25
Support level: 155.30, 153.60
Oil prices have extended their losses to a six-week low due to rising expectations of a ceasefire in Gaza and growing concerns over the economic outlook in China. Efforts to reach a ceasefire deal between Israel and Hamas have gained momentum, with US President Joe Biden playing a mediating role. Additionally, economic concerns in China, a major importer of crude oil, are weighing on oil prospects. These factors combined are contributing to the bearish outlook for oil prices.
Oil prices are trading lower while currently testing the support level. However, MACD has illustrated diminishing bearish momentum, while RSI is at 35, suggesting the commodity might enter oversold territory.
Resistance level: 78.35, 79.70
Support level: 77.00, 75.05
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